Airport Size and Urban Growth

36 Pages Posted: 6 Mar 2019

See all articles by Nicholas Sheard

Nicholas Sheard

Aix-Marseille University - Aix-Marseille School of Economics

Date Written: April 2019

Abstract

This paper studies how airports affect economic growth in US metropolitan areas. The main finding is that airport size has a positive effect on local employment, with an elasticity of 0.04. The effect appears to be mostly due to a positive effect on services employment and to be concentrated in parts of the metropolitan area nearer the airport. To further understand how an airport affects the local economy, the effects on several other variables are estimated. Airport size is found to have positive effects on the number of firms, the population size, the rate of employment, and GDP in the local area. The magnitudes of the effects on population and employment suggest that airport expansion creates jobs for both existing residents and migrants to the area. The estimation uses a novel technique to identify the effects of airport infrastructure. It applies instruments for changes in airport size that are calculated from overall changes in air traffic in a set of categories: the airlines, the types of aircraft, or the distances flown. The technique could be adapted to study the effects of other types of infrastructure.

Suggested Citation

Sheard, Nicholas, Airport Size and Urban Growth (April 2019). Economica, Vol. 86, Issue 342, pp. 300-335, 2019. Available at SSRN: https://ssrn.com/abstract=3345649 or http://dx.doi.org/10.1111/ecca.12262

Nicholas Sheard (Contact Author)

Aix-Marseille University - Aix-Marseille School of Economics ( email )

2 rue de la Charité
Marseille, 13236
France

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